singapore, us in talks over pharma tariffs, ai chip access

2025-04-28 general

Singapore, Monday, 28 April 2025.
singapore is in talks with the us to negotiate concessions on pharmaceutical tariffs. the city-state also wants to ensure continued access to high-end ai chips. these discussions come as singapore faces a 10% levy from the us, despite a free trade agreement. pharmaceuticals account for over 10% of singapore’s exports to the us. amid a softening economic outlook and upcoming elections, singapore seeks to mitigate potential recession and job losses.

negotiations and key concerns

Deputy Prime Minister Gan Kim Yong spoke with U.S. Secretary of Commerce Howard Lutnick on Friday [1][7]. Lutnick voiced concerns regarding export controls on chips, extending beyond just Singapore [1][2]. He expressed interest in identifying ‘creative solutions’ to bolster bilateral trade [1][2]. Gan addressed Singapore’s export control system, assuring that Singapore does not support using its presence to circumvent U.S. export controls [1][2]. These discussions are vital for investors monitoring trade relations and potential shifts in supply chains.

pharmaceuticals and tariff implications

Gan Kim Yong highlighted the importance of pharmaceutical exports, which constitute over 10% of Singapore’s exports to the U.S. [1][2][4][7]. Singapore seeks concessions on potential tariffs in this sector [1][2]. While the U.S. is not prepared to reduce the existing 10% baseline tariffs, both countries will explore ways to deepen economic ties [4]. Investors should closely watch these negotiations, as tariffs could impact the profitability of pharmaceutical companies operating in Singapore and their access to the U.S. market [6].

ai chips and technological access

A key aspect of the negotiations involves Singapore’s access to high-end AI chips from the U.S. [1][2][7]. Gan emphasized the importance of this technology for sectors like data centers [7]. Lutnick expressed a willingness to work with Singapore to ensure continued access, despite concerns about export controls [4]. Restrictions on AI chip access could negatively affect Singapore’s technology sector and related investments [6]. The outcome of these discussions will be crucial for companies relying on advanced computing capabilities.

economic context and potential impact

Singapore’s economic outlook is softening, with a GDP forecast downgraded to 0%-2% after a 0.8% quarter-on-quarter contraction in the first quarter of 2025 [1][3]. The 10% U.S. levy adds to economic uncertainty, potentially leading to recession and job losses [1][3][6]. Singapore is holding a general election on May 3 amidst these economic pressures [1]. Investors should factor these macroeconomic conditions and political developments into their assessments of Singaporean assets and investment strategies. The government’s ability to navigate these challenges will influence market sentiment.

Bronnen

Export Controls Bilateral Trade